Justice News

Massachusetts Couple Sentenced to Prison for Tax Crimes

Husband and Wife Last Filed Return for 1999 Tax Year

WASHINGTON - Frederick Allen and Kimberlee Allen, both of Harwich, Mass., were sentenced to three years in prison for conspiracy, tax evasion and failure to file tax returns, the Justice Department and Internal Revenue Service (IRS) announced today. A jury convicted the couple on April 21, 2010.

At trial the government presented evidence that proved that Frederick and Kimberlee Allen, who own a business on Cape Cod that specialized in nutritional and vitamin consulting, did not submit tax returns to the IRS since tax year 1999. The evidence was that the two conspired to conceal their assets and income from the IRS.

Among other acts, the government proved that the Allens concealed their income and assets from the IRS by receiving unreported wages, putting their residence in a trust, assigning their wages to third parties and using cash. Despite working in 1998 and 1999, Kimberlee Allen as a nurse practitioner and Frederick Allen as office administrator at various medical and nutrition offices on the Cape, the two filed income tax returns with the IRS that reported zero income and zero taxes due. From 2000 on, the IRS tried to obtain the outstanding taxes due and owing from the Allens. Instead of paying what they owed, the Allens refused to file income tax returns and engaged in a pattern of conduct intended to obstruct the IRS and conceal their assets and income from the IRS.

“Prosecuting individuals who intentionally conceal income and evade taxes is a vital element in maintaining public confidence in our tax system,” said William P. Offord, Special Agent in Charge, IRS Criminal Investigation. “Tax evasion is not a victimless crime. Honest, hardworking Americans pay the price when others choose to evade their tax obligations.”

Acting Assistant Attorney General John DiCicco commended the investigative efforts of IRS Criminal Investigation and the Massachusetts Department of Revenue, as well as Tax Division Trial Attorneys Karen Kelly and Michelle Petersen, who prosecuted the case.

More information about the Justice Department’s Tax Division and its enforcement efforts is available at www.usdoj.gov/tax/.